Transmission of Quarterly Report for the Period Ended 31-12-2024

CONDENSED INTERIM STATEMENT FOR SIX MONTH PERIOD ENDED DECEMBER 31, 2024

Half Yearly Report

December 31, 2024

UN-AUDITED

1. Mr. Ali Maqsood Butt :

2. Mr. Faisal Khan :

3. Mr. SH. Ghulam Mustafa :

4. Mrs. Durray Zara Butt :

5. Dr. Aruj Butt :

6. Mr. Muhammad Sajjad Hussain :

7. Miss Amara Javid :

Chair Person Chief Executive Director Director Director Director Director

Mrs. Durray Zara Butt

Mr. Muhammad Sajjad Hussain

Mr.Mian Waheed Akhtar,

Advocate High Court/ Supreme Court Lahore.

2-KM Off Raiwind-Manga Road, Raiwind, Lahore.

Tel: (92 - 42) 35393125-6, 38102800

Fax: (92 - 42) 35393127

E-mail: info@aruj.com Website: https://www.aruj.com

M/s. Corplink (Pvt.) Ltd. Wings Arcade, 1-K , Commercial Model Town Lahore.

Tel: 35839182, 35869037

M/s. Qadeer & Co. Chartered Accountants, 32-A Lawrence Road, Lahore.

Mr. Muhammad Sajjad Hussain Mr. SH. Ghulam Mustafa Miss Amara Javid

Chairman Member Member

2-KM Off Raiwind-Manga Road, Raiwind, Lahore.

Tel: (92 - 42) 35393125-6, 38102800

Fax: (92 - 42) 35393127

E-mail: info@aruj.com Website: https://www.aruj.com

Bank Alfalah Limited. Habib Bank Limited. Bank of Punjab.

JS Bank Limited.

Habib Metropolitan Bank Ltd. Faysal Bank Limited.

Meezan Bank

Bank Al Habib

Mr. Muhammad Sajjad Hussain Dr. Aruj Butt

Miss Amara Javid

Chairman Member Member

DIRECTOR'S REPORT TO MEMBERS

Your Directors have the pleasure to present to you the Financial Statement of the company for the Half Year ended 31st December, 2024

Your company is still searching for ways to get back into production. While there might be interest rate drops from the next quarter onwards, political instability has led to a mixed atmosphere for business.

Rest assured, we are vigilantly working to find an amicable solution to our current dilemma, which includes a closer partnership with local vendors to help us jumpstart production.

Future outlook

We do hope that the new government would bring back some of this lost confidence. As stated before, your Company believes business outlook should start turning positive beginning from the 4th quarter of the current financial year.

Note of Thanks:

The Board would like to extend our sincere gratitude to its valued shareholders, customers and raw materials suppliers whose cooperation, constant support and patronage have enabled us to achieve our desired results.

The Board would also like to express its thanks to the Executives, Staff members and especially the Workers of your Company, who have loyally worked with utmost effort to make this all possible

FOR AND ON BEHALF OF THE BOARD

Lahore FAISAL KHAN

Dated: August 29, 2025 Chief Executive

2023

2024

2024

2025

Introduction

We were engaged to review the accompanying condensed interim statement of financial position of Aruj Industries Limited (the Company) as at December 31, 2024 and the related condensed statements of comprehensive income, condensed statement of changes in equity, condensed interim statement of cash flows for the six-month period then ended, and notes to the financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of this interim financial statements in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this condensed interim financial information based on our review. However, because of the matters described in the Basis for Disclaimer of Conclusion paragraph, we were not able to obtain sufficient appropriate evidence as a basis for expressing a conclusion on the financial statements.

Scope of Review

We were required to conduct our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Disclaimer of Conclusion

• As reported in note 2 of these financial statements, the Company has incurred accumulated losses amounting to Rs. 396.620 million (December 2023: Rs. 124.003 million) and net losses during the year comprises of Rs. 20.969 million (December 2023: Rs. 84.383 million). In addition, the Company's current liabilities exceeded its current assets by Rs. 414.228 million (December 2023: Rs. 139.951 million) at the year end. The situation may result in severe liquidity crises. These conditions along with adverse key financial ratios indicate the existence of material uncertainty which may cast significant doubt about the company's ability to continue as going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business. We do not conform with the management assumption of the ability of the company to continue as a going concern;

• As disclosed in notes 11, balance payable to various banks remains unpaid and unconfirmed, including short-term borrowings of Rs. 682.374 million and accrued mark-up on loans of Rs. 7.927 million. Additionally, we were unable to verify the accuracy or the terms and conditions of these balances. Consequently, due to the unavailability of information, any necessary adjustments and their potential impact on these financial statements remain unascertained;

• The trade and other payables mentioned in note 10 to the financial statements include old outstanding balances. We could not verify the actual liability. The effect of adjustment, had the liability been verified, could not be determined;

• The trade debts of Rs. 274.630 million, including old outstanding balances. In our opinion, certain balances appear to be impaired, but no allowance for expected credit loss (ECL) has been recorded. However, the actual impact of adjustments, had the allowance for ECL were provided, could not be determined.

Disclaimer of Conclusion Because of the significance of the matter described in the Basis for Disclaimer of Conclusion paragraph, we have not been able to obtain sufficient appropriate evidence to provide a basis for a review conclusion. Accordingly, we do not express a conclusion on the accompanying financial statements.

The engagement partner on the review resulting in this independent auditor's report is SALAHUDDIN MAHMOOD, FCA.

Lahore:

Date: August 29, 2025 UDIN: Ar202410809elfpk4sb6

QADEER & COMPANY

CHARTERED ACCOUNTANTS

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED) AS AT DECEMBER 31, 2024

CURRENT ASSETS

Stores, spare parts and loose tools Stock in trade

Trade debts

Loans and advances 14

Tax refunds due from the Government 15

Cash and bank balances 16

379,885,590 385,658,262

408,819,886 597,571,490

788,705,476 983,229,752

The annexed notes form an integral part of these condensed interim financial statements.

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR

Six Months Ended Dec. 31, Quarter Ended Dec. 31,

The annexed notes form an integral part of these condensed interim financial statements.

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR

Six Months Ended Dec. 31, Quarter Ended Dec. 31,

Loss for the period (20,969,015) (84,383,680) (8,681,121) (52,626,966)

Other comprehensive income - - - -

Total comprehensive loss for the period (20,969,015) (84,383,680) (8,681,121) (52,626,966) The annexed notes form an integral part of these condensed interim financial statements.

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR

Un-audited Un-audited

Dec 31, 2024 Dec 31, 2023

Note Rupees Rupees

CASH FLOW FROM OPERATING ACTIVITIES

Loss before taxation (20,966,617) (76,907,851)

Adjustments for:

Depreciation 13

Finance cost

15,062,634 32,405,580

Cash flows before working capital changes (5,903,983) (44,502,271)

(Increase) / decrease in current assets Stores, spare parts and loose tools Stock in trade

Trade debts

Loans and advances Other receivables

Increase / (decrease) in current liabilities

Trade and other payables

The annexed notes form an integral part of this condensed interim financial statements.

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR

The annexed notes form an integral part of this condensed interim financial statements.

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR

1. LEGAL STATUS AND OPERATIONS

   Aruj Industries Limited ("the Company") was incorporated in Pakistan on December 31, 1992 under the Repealed Companies Ordinance, 1984 (now the Companies Act, 2017), as a Public Company, limited by shares which are quoted on Pakistan Stock Exchange Limited. The Company is principally engaged in manufacturing of Fusible Interlining and Dying / Bleaching / Stitching of Fabric. The Company commenced its commercial operations on May 15, 1995.

   The geographical location and address of the Company's business units, including mills/plant is as under:

   Geographical location

   2-KM, Off Raiwind Manga Road, Raiwind, Lahore. 1-KM, Raiwind Road, Thokar Niaz Baig, Lahore.

2. GOING CONCERN ASSUMPTION

   During the half year period ended December 31, 2024 (interim period), the Company has incurred a gross loss of Rs. 14.907 million (December 31, 2023: Rs. 45.997 million). It has also incurred a net loss of Rs. 38.882 million (December 31, 2023: Rs. 84.383 million). In addition, as at the period end, its accumulated losses stand at Rs. 414.533 million (June 30, 2023: Rs. 39.620 million). These conditions indicate the existence of material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in the normal course of business.

   The Company's continued viability relies on achieving acceptable profitability levels and maintaining adequate working capital, supported by sustained backing from Sponsors and principal lenders. Management expresses confidence that the Company will persist as a going concern and attain favorable profitability and liquidity in the future. This confidence is substantiated by the consistent provision of financing for working capital needs by the Company's directors, successful negotiation and utilization of Rs. 78.000 million short-term borrowing from Meezan Bank Limited in the previous period, effective discharge of outstanding liabilities related to staff retirement benefits and other financial obligations in prior periods, and the anticipated reduction in financial costs through repayment of long-term loans and markups on short-term borrowings, expected to contribute to profitability in subsequent periods.

3. BASIS OF PREPARATION

   These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards applicable in Pakistan for interim financial reporting comprise of:

   • International Accounting Standard (IAS) 34 issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017;

   • Provisions of and directives issued under the Companies Act, 2017.

   Where the provision of and directives issues under the Companies Act, 2017 differ with the requirements of IAS 34 or IFRS, the provisions of and directives issued under the Companies Act, 2017 have been followed.

   These condensed interim financial statements have been subjected to limited scope review by the auditors, as required under section 237 of Companies Act, 2017 and should be read in conjunction with audited annual financial statements of the Company for the year ended June 30, 2024. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and performance since the last annual audited financial statements.

   The figures included in the condensed interim statement of profit or loss and condensed interim statement of comprehensive income for the quarters ended December 31, 2024 and 2023 and the notes forming part thereof have not been reviewed by the auditors of the Company, as they are required to review only the cumulative figures for the half year period ended December 31, 2024 and 2023.

4. BASIS OF MEASUREMENT

   This condensed interim financial information has been prepared under the historical cost convention. In this condensed interim financial information, except for the condensed interim statement of cash flows, all the transactions have been accounted for on accrual basis.

5. MATERIAL ACCOUNTING POLICY INFORMATION

   The accounting policies and methods of computation adopted for the preparation of this condensed interim financial information are the same as those applied in the preparation of the financial statements for the year ended 30 June 2024.

   1. Change in accounting standards, interpretations and amendments to published approved accounting and reporting standards

      1. New standards, amendments and interpretation to published approved accounting and reporting standards which became effective during the period ended December 31, 2024.

         There are certain amendments to published International Financial Reporting Standards and interpretations that are mandatory for the financial year beginning on July 01, 2024. These are considered not to be relevant or to have any significant effect on the Company's financial reporting and operations and are, therefore, not disclosed in these condensed interim financial statements.

      2. New standards and amendments to published approved accounting and reporting standards that are not yet effective.

      There are certain standards, amendments to the accounting standards and interpretations that are mandatory for the Company's accounting periods beginning on or after July 1, 2024 and have not been early adopted by the Company. However, these will not have any significant impact on the financial reporting of the Company and, therefore, have not been disclosed in these condensed interim financial statements.

6. SIGNIFICANT ACCOUNTING ESTIMATES, JUDGEMENTS AND FINANCIAL RISK MANAGEMENT

   The preparation of these condensed interim financial statements are in conformity with the approved accounting and reporting standards as applicable in Pakistan for interim reporting requires management to make estimates, assumptions and use judgments that affect the application of policies and reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on the historical experience and other factors, including reasonable expectations of future events. Revision to accounting estimates are recognized prospectively commencing from the period of revision.

   Judgments and estimates made by the management in the preparation of these condensed interim financial statements are same as those applied to financial statements as at and for the year ended June 30, 2024.

   The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended June 30, 2024.

   10 SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED) FOR THE HALF YEAR ENDED DECEMBER 31, 2024

   Un-audited Audited

   December 31,

   2024

   June 30,

   2024

   Rupees Rupees

7. DIRECTORS' LOAN

   Loan from directors - unsecured 99,524,854 97,058,538

8. LONG TERM LOAN

1. CONTINGENCIES AND COMMITMENTS

   Contingencies There is no material change in the status of the contingencies reported in the annual financial statements for the year ended June 30, 2024. Commitments

   There were no major commitments as at the reporting date (June 30, 2024: nil).

2. PROPERTY PLANT AND EQUIPMENT

16 CASH AND BANK BALANCES

Cash in hand Cash at bank

233,563 151,500

1,697,082 1,697,082

1,930,645 1,848,582

17 TRANSACTION WITH RELATED PARTIES

Receipt of Directors' loan - net 2,466,316 -

18 ENTITY-WIDE INFORMATION

• The Company constitutes of a single reportable segment, the principal classes of products are Fusible Interlining, Dying / Bleaching / Processing, Stitching of Fabric and other related products.

• All of the revenue of the Company during the period relates to the customers in Pakistan.

• All non-current assets of the Company as at the period end are located in Pakistan.

19 DATE OF AUTHORIZATION FOR ISSUE

These condensed interim financial statements were approved and authorized for issue on August 29, 2025 by the Board of Directors of the Company.

20 CORRESPONDING FIGURES

Corresponding figures have been reclassified wherever necessary to reflect more appropriate presentation of events and transactions for the purpose of comparison. However, no significant rearrangement / reclassification of corresponding figures have been made.

21 GENERAL

Figures have been rounded off to the nearest of Pakistani rupees.

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR

BOOK POST

UNDER POSTAL CERTIFICATE

If undelivered please return to:

ARUJ INDUSTRIES LTD.

2-KM Off Raiwind-Manga Road, Raiwind, Lahore Tel: (92 - 42) 38102800, 35393125-6

Fax: (92 - 42) 35393127

E-mail: info@aruj.com Website: https://www.aruj.com